Any little thing that plugs into a computer, if its a USB receiver for a wireless mouse, or an adapter for a graphics card, its just something small that is useful and often necessary.
In the old old old days they connected to a serial or parallel port and were used to ensure that you had legitimate license to use the software, i.e. without the hardware dongle the software would not work.
^ "old old old"
Still using. Have a Parallel Port Dongle on computer @ work and Have one at home for a software Embroidery program Dongle. Were used mostly on high cost software.
But correct in that they are prety much outdated, replaced by requirement to activate software.